Thursday’s Supreme Court decision in the King v. Burwell case can be seen as a major victory for the Obama Administration, resolving, at least for the time being, the continued implementation of the Affordable Care Act by upholding insurance subsidies for about 6.4 million consumers in over 34 states. Once again, Chief Justice John Roberts, came to the rescue of this much contested presidential Act concluding that a key phrase “established by the state” does not necessarily mean what it says, and that given the magnitude of the implications that would necessarily result from a contrary interpretation, this was the only rational determination that could be reached. As Chief Justice Roberts notes, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them” and that the context and structure of the Act” are more important than any one phrase. Roberts was joined in this 6:3 decision by his fellow Justices Kennedy, Ginsburg, Breyer, Sotomayor and Kagan.

The dissenting opinion was raised by Justice Scalia and joined by Justices Thomas and Alito. The dissent argued that the majority was unnecessarily favoring this law, and was prepared to do whatever it took to uphold a favorable interpretation of its language. In a scathing rebuttal to the majority opinion, Scalia noted that “words no longer have meaning if an Exchange that is not established by a State is “established by the State” and that the use of this phase in seven separate places within the opinion could hardly be termed “accidental.”

The majority opinion on the other hand, is based upon a premise that the phrase “established by the state” need not exclude an exchange established by the federal government. Roberts, and the majority concluded that the discord between the statutory text and the underlying intent and purpose of the Act rendered the statute “ambiguous” and that it was the Court’s function to resolve the ambiguity. This decision flies in the face of an earlier determination by the Fourth Circuit Court of Appeals in how ambiguities of statutory language should be resolved. While the Fourth Circuit gave complete deference to the regulatory agency responsible for implementing the ambiguous language, the majority opinion states that such deference is appropriate only when Congress intended to give it. When Congress is not clear, then the Court must interpret the ambiguous language in the full context of the underlying statute and in such a way as to carry out the underlying Congressional intent.

This decision brings needed closure and relief to industry stakeholders – particularly those individuals who would not otherwise be able to afford coverage without the subsidy, and those insurers who sell policies in states with federally facilitated exchanges. While other challenges are likely to be seen in the future, at least for the time being, the ACA remains alive.

Additional history and likely impacts of this ground breaking decision will be offered in future blogs.

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